Zedge (ZDGE) 15 Mar 242024 Q2 Earnings call transcript

Good day, and welcome to Zedge's Earnings Conference Call for the Second Fiscal Quarter 2024 Results. [Operator Instructions]

I will now turn the call over to your host, Brian Siegel. The floor is yours.

Thank you, operator. today. Reich, Financial Executive financial Officer, results we Jonathan Tsai, and and presentation, that Chief Zedge's will reported today's Zedge's Officer; Chief Yi operating In discuss Zedge's specific call Any actual during the forward-looking results session, or to in are call. These general in risks whether during that differ risks materially statements uncertainties with this not from and risks today's and question-and-answer to on are files the uncertainties remarks uncertainties future or made the the limited prepared in discussed in to, and disclosed nature, subject periodically reports but include, those specific conference Zedge SEC. the may cause Zedge that Investor Relations update from is differ assumes statements the materially forward-looking that our available to that on the of results or any they forecast. Please to earnings the those no release note to may website. Zedge obligation update page factors cause actual been SEC. I Jonathan. turn Form release on X-K has earnings the call also the with The to filed over like would to

morning. quarter growth. Good begin from our for have long-term and reviewing us for increased all revenue landscape. we our briefly by I macroeconomic you second us positioned thank today. industry-specific last geopolitical challenges demonstrating year joining year and XXXX will how sustainable fiscal managing investments you, XX% as continue QX results, Thank Brian, the spanning the

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integrated We business, it our technology including have already throughout marketing. product, and

financial call to Yi? results. turn the Yi, I our Now will review like over who to would

Thank you, Jonathan.

with earnings requires align write-down performance to important million assets. current that $XX.X a timing, event you of the as As value our a noncash this intangible in books. us to not GAAP GuruShots did saw on take our It's one-time release, underscore by was noncash dictated carrying

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GuruShots. achieve and time, that As we will goals Jonathan acquired still when that growth indicated, with we we we the strategic invested believe unlock

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to have and related year, a we forward. release over morning. As added from strength result EPS plan GAAP metrics new non-GAAP in diluted valuation to this for that as The the the non-GAAP going past to non-GAAP report available is reconciliation our income earnings of net we

framework, Total Monthly from Zedge XX.X% QX, markets X.X%, up was last XX.X% encompasses year active were was user year. or developed again million, impacted XX% GuruShots, the was from quarter revenue year. Digital revenue from Apple's to XX% year. from came in million. up down decreased markets last the $X.X respectively. second ATT $XX.X emerging revenue in XX% negatively $X.X revenue situations. Subscription a issues versus MAU, and the macroeconomic and for and geopolitical marketplace for services, ago which quarter at by goods second last in and million, to down Similar GuruShots' MAU well the

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bank million forward my that you with our during again and Operator, outstanding for Q&A. mid-June. Now in in next look to call, listening back to we I to for quarter. Thank quarter on $X the second you pay call down earnings the speaking you loan

the Your Instructions] Klee Allen from with coming first is Maxim [Operator question Group.

It's is first rates. you on I seasonally but Congratulations think. had it's -- record also revenue strong question advertising the quarter, your My strongest growth.

how So some seasonal to parse when think stuff? to about is what degree, out other effect maybe we versus

in halfway so our mentioned actually I much your And earlier numbers thanks comments. we're up. seeing through my of as are for quarter, holding that the the summary quarter, Allen,

secular So due features ad well factors, a secular both ad to of stack-wise that some as, I combination factors. tech-wise or guess, feature-wise, some as is or

budgets of it's a because of drop-off our perspective so quarter to ad parse on from hard bit in is that our sort by forth. so and and little post-season an out light weakest typically, and QX revenue contrast, So ad

keep pAInt the web you're I transactional marketplace, what think the going? are Is and then on and That's said growth there to way terms a up like functionality XX%. in gross that about and sold just doing great. of that things you was in the there's drivers key And value marketplace this to greater of think

Sure.

content, but Premium Just talking more which not the content? Zedge about overall talking or about are you includes are licensed user-generated to be marketplace, you only specific, also

both. For

Premium, Well, take when iterate continue Zedge you at there. tune, And which you're result, seeing licensed the as is a area, to improvements optimize. content a look the we

look Premium what about think to can with web. like And the what beginning overall -- app terms now global can Zedge also are Zedge or in the We Zedge across expansion of we improving user continually experience. as experience. the a Zedge on optimizing work adding There as be and that function user well of have done is marketplace, features can it's that the

areas One retention. talked we're impact relates served the to up look about the into that the How and of to recommendations experience? improving to now users. onboarding. In projects user past, the and And that's then that engagement does beginning content around we've

each the then iOS from today. we in that, very positive And Android results out for Zedge+ last totality, those rolling on results the we on and work time that and yielded that reported in subscription of also done So for mentioned, apart to has contributes subscription as overhauling year separate I the had terms of us. first the Zedge+

type subscription. you subscription the are sequentially. were the they Zedge is sequentially? Do different we also paid for Or just so that then ad-free? number that, subscribers can being Just your flat another Zedge+ it, same? continue of you think grow understand marketplace to get there's Can And

our is Zedge+ offering. So subscription

Our value offering has subscription bundled together adds. several

whether One be it, but as AI value used insofar bots there an be of that And ad-free, in value potential as for there, described of it of [ images you example. adds growth are creating number then ] as those additional subscribers. adds can is

grows to when to work is subscription make over a about Android attractive. If it metaphor to more it that you number provide or to clearly be whether think even subscription there I on offering, Amazon. aspiration ongoing see is Our iOS, with were that that, on to respect how time. And

seeing adds, be that said, than more metaphor, have in So Amazon is bringing I in going value improvement those introduced it that that make attractive also delivery, subscription are it subscribers. value more of even but in, terms of work content, on offer that the continue the the whether new ultimately has attractive as we so a was and other exists to overnight whether what of in can to so and and it subscription today. And heavily back offering XXXX, we that they overhaul making invested be a that adds, And an terms wealth storage as we to offering in forth.

not to are there I you'd Emojipedia, you of numbers if sure year-over-year don't -- add. revenue? you you're if Also, terms In provided terms to of know or over it did able any grow in like provide the actions results said I'm new

mashups mashups and emoticons You -- around and kaomojis mentioned you Emoji are? probably just some saying things Could I'm like kaomojis. and tell me what

Sure.

it contract. a But So either keep a smiley they these and a so That and simple. just they are have content a one today content, in or are and of These smiley emoji, type on new face way colon is new by when yellow renders so close can to parenthesis. forms. a forth can example,

and is new within a one Emojipedia that's So there as are vertical messages, connote add for us to the a and text that many. various potential content strings that direction of

your of to to hand numbers, going answer terms Yi to off question. I'm In

great that the in growth was months, but if hopeful, not quarter second we as at we X as XX%. Emojipedia, still the look so had you grew Allen,

January, X we grew X%. only For about months ended

start you're that And some of key things then you is a is focused slightly monthly highlight the get up of one maybe to It [indiscernible] to you as was growing Could users. think number sequentially, just encouraging. I mentioned the monthly that which priority active areas on again?

Sure.

type together we or without on then from whether reverse hoping we reimagining So promising through user benefiting that have plans. And product a I'll that believe at the are of and are force we to complementary influencer that task from that products new base to be are that to unlock of growth, growth place. then, couple the would investments management call help that we ways looking participation we marketing, working also that and we referral We various of app course, are potentially together, unlock enhancements, what taken of employees a rank-and-file can and have of -- Zedge see taking opportunity. feature be trend all Zedge we activities those a put acquisition fuel growth. And installed it additional separate incentive separately, of that features and plans, apart and what that

add. I to would like just Allen,

] stayed XXX,XXX, like though as value Sorry, subscription -- at as just mentioned, lifetime I [ but would we to our even subscription. replacing we higher flat lower as value active a subscribers are the annual from well with subscription

base same, our So much although the the revenue higher. remained but active subscribers was

Yes, point. that's it's be My on this a questions. But savvy in hard a I'm and a bad good being experience, GuruShots, personal newbie. stuff. not a Then example, that of to couple

when it certain a can't engage seems difficult level. to tells it on, to get a of in you, bunch things and you get engage you first know-how So to until you

maybe should you So Turbo about And you're is feature, out? little then then to could help the why you doing currencies virtual you're what that? to add? what feature multiple change also talk and a And that new going what actually the

taken very Thank and you, Allen, well point respect to with onboarding.

had in and you to lot in against competing of that has is downloads other the with game, full a they it. photographers into immediately said, GuruShots that a today features X,XXX dashboard immersed numbers that newbie a be to competition they are a up As competition, can enter that

that the and of funnel this allow thing So a up base very, to user immediately, we the also out. Overall, and users opens get which that has loyal simplify to users and to so going to hopefully us accessible will this allows expands to then good fun to very so to such skills features top and and are player that saying, contribute they them. And will may insistent as the funnel, folks making onboarding potential they're for into be exceptionally exposure on figure gameplay, play so that gain forth, master and the additional forth. making progression game on for then competitive more begin think on and they that so not photographers the with

onboarding to I addition have or, guess, the In an more duration. shorter makes will element game it that, that the to in

The that challenge could GuruShots to a can hour, that X duration could will it it The typical rigid playing hours could changing game. while today minutes, from a purchase in photo and forth. With of onboarding So XX so -- through notion the range is respect it is resources There economy in way decrease and can an a days. event. feature be the going be economy. that game are those from in-app so users several benefit hard to today be on the resources to And game to X X access be economy. to through

lot use will in the buy come ultimately game in edge it Meaning master way, more reward terms reward those for B game. to you allows use economy, new have with player X,XXX, potentially is order it second a every to not flexibility another you or about feel are the and resources with will the to every the may allows an a that you X,XXX even C. To ranks for any that have player, to need those has resource able A, see respect those in X resource which currencies, you your If come form you our that to ranking, this have resources. it one with though really to or of ability or portfolio great does game to rewards or economy to that a player to the yourself. Even a and that in first, and relevance be coin-based of coin-based gain fourth, get in be third migrating multiple lowest of shape, in which and also today means you don't don't if place, us reward playing game,

the As asset. gaming gaming, that team revenue of order product to to during interface, managers generation can made comments, taken design, out of gaming also will and to user companies very, totality, user well-known well user hope team. economies is leading have done that improving but the well come that the I user community changes now what optimize product that in most in very with global mentioned is contributing growth ultimately be And some my unlock and together, in as a we've our inherent in not experience, And that the only of engagement those resourced to expectation experience believe this as product we economies. retention. In is better

number battles the In the in decreasing features number are will they're like, terms gain new in win to to ultimately also feel again, actually that around against, of dopamine for just what accordingly. game limited addition a real competitors' that, short-term order then of of they in question? for can features, new the the to most offering that for type time and being to get the win battle, that -- quick in of that of the are having game I be they're Does an to immediately well, allowing win call chances expand time and for people that now middle this users period wait users your therefore, answer a mini and competing to already beginning flow that that increasing and a competing to of extended without stand-alone battle. And accolade

was Yes. thorough. very That

Master? you that? Can on on Just some Art provide update an AI updates

Sure.

gather Master launch, we in the hard are to growth decision Art data. at at in soft game, core soft We and AI we So unlocking remains made continue keep work the to in launch. the GuruShots while it

we get Master. on growth, that it take to and AI as thinly allow to GuruShots game is as and forth. we and resources in currently AI we launch will time that will and GuruShots' spread so trajectory plan evolve, Our we on Art Master will Art that this We iterate don't refocus this the ourselves progressing then so when not believe want we just so to game direction the that we're for that efforts

in AI which Art really, is a where monitor Master. game at of done That then valuable to with would Master data how be point and really we terms is to our the be what going future the well to focusing one are guide Art that next on getting thing, thing exceptionally is and direction now helping evolves. So AI able data. progressing it

then talked you casual same the launching answer answered on kind guessing game. a that or... I'm about status And call, a the in hybrid potentially similar Is past of

hybrid is are AI another. Those from Art and category. in not separate casual that Master distinct one

Okay, got it.

seasonally And for Okay. jump of financials. new a the well to versus in about then strong is things is a acquisition paid you've degree look of of this quarter some on like we SG&A that perhaps to question some more the on of the think do -- brought that talked other quarter, you as The at what or -- some way -- the that people. kind of and

So to maybe of get run rate for of a I'm it kind seasonal of a SG&A? versus much trying is sense how new

Sure. a bit. actually SG&A that I in little would reframe includes it. marketing

particular works, scale said budgets you what that. where is continue platform, call user we So it, spent there. And acquisition, as try past, user steady the on creators try like there when we'll a paid to then actual at there's a in state acquisition. stuff investing is platform. order This we number. this there that budgets, is to I are going be you of One the And but obviously that money X components and have ceiling paid test new in there in of new campaign looking

not. does that of some works, stuff that of some And

bring in-app also to Apple a to we components be pay there subscriber that on acquisition. fee both purchase. makes user it whether the But a paid need or in Google an user then when or order scale when You is we

way in base, anything SG&A opposed properly add have goes expense way up, infrastructure for SG&A that? that's look If purchases, it So contrast. Yi, X we're subscriber in those increase taken together not for SG&A. our actually up if contributed the of we're our to is, successful in-app that successful you more we're generating managing a sort to components of to at And materially to to do I in by growing as want the good reason go you

Yes. only expansion and our Allen, I stable remains net last SG&A with will in our add, is quite line year. actually compensation

SG&A, Jonathan in also is increase see. we order in the platform marketing and the the spend So mentioned,

Play's downside the out of One Google view, is one done. of when from subscriptions point you this lifetime is rolled

treat purchase. they So a as in-app

at a which pay XX% fee than So we regular XX% is a a rather subscription, fee.

platform lifetime went out So up virtue subscription as [indiscernible] a result, by of fees our on our rolling

conference and our call. you Thank conclude does attending presentation. This today's for question-and-answer the session

now disconnect. You may